We are getting ready to purchase another house as our new primary residence. Our plan at the moment is to keep the current house and rent it out. Since we bought this house 10 years ago it has appreciated nearly $170K. My understanding is that we have a $250K tax exemption from capital gains available as long as we sell the old house within three years of moving into the new house.
So my net question is: What is the key criteria for making the decision to keep the old home beyond the three year threshold? I guess the trade-off is between the capital gains exemption and potential longer-term appreciation on the rental house. But I want to make sure I am not missing anything else…